Beyond banking: DBS as a trusted business partner to SMEs

As SMEs prepare for a challenging new year, DBS is stepping up to anticipate change and provide timely support. Koh Kar Siong, Group Head of SME Banking, Institutional Banking Group, DBS Singapore, shares his thoughts on the bank’s strategy to support businesses amidst economic headwinds, in the importance of building trust with SME clients, and DBS’ commitment as a business partner to the community.

Koh Kar Siong

As DBS’ new Head of SME Banking, what banking resolutions do you have for the new year?

My top-of-mind priority in 2023 is engagement with our clients. At DBS, we always put our clients at the centre of what we do. We want to help SMEs realise their potential and maximise their capabilities to build a better future for their businesses. We aim to be a trusted partner and advisor to them.

SMEs have weathered different business cycles over the last few years. Unfortunately, many have reached a growth plateau and they are stuck.

With the right decisions and support, they can break through that plateau and progress to the next level. But if they misstep – such as unsound investment decisions or poor capital structure – they may struggle to service debt and meet their obligations.

This is where we can add value. It’s in our blood to serve the SME community and we will continue to provide them with the right advice and solutions to earn their trust and partner them to achieve their aspirations.

DBS has certainly gone beyond banking to partner SMEs at every step of the journey. Would you say that DBS strives to be a business partner to SMEs?

Yes, we don’t just see ourselves as a financial advisor but also a business partner. We see their business as our business, and that means we put our heart and soul into understanding what they need. I believe that unless we put ourselves in our clients’ shoes, it’s just lip service.

We’re organised in such a way that our Relationship Managers have deep knowledge in their specialised industries, and this enables us to really understand SMEs’ businesses end-to-end. Rather than just lending them money, our Relationship Managers can understand their unique pain points and structure solutions for them. 

Such relationships take years to build. I believe the key is sincerity, honesty, and transparency. It’s very rewarding when our clients start to treat us like family – especially when it’s a family business.

There have been many instances where our clients turn to us to bridge a generation gap in the business. Sometimes the younger generation wants to bring in new technology with heavy capital investment, and the older generation will be more resistant to change. 

That’s when we use our insights into macro-trends to build a bridge and help these two generations see eye-to-eye.

How do you plan to build that relationship of trust with SMEs?

I think it all comes down to face-to-face engagement and sharing. Transparency enables trust, but it takes two hands to clap. 

To start off, SMEs need to share with us about their plans and key milestones. Likewise, we need to be open about whether their plans are realistic and the capabilities we can offer to help them hit those milestones.  

DBS has in-depth insights into the business landscape and macro-trends of various sectors. With a rich ecosystem of partners to help businesses achieve their goals faster, we can share case studies of past clients in similar industries with similar plans to help SMEs avoid the same pitfalls. However, this will require our SMEs trust in sharing their plans and to accept us as their advisors.

As entrepreneurs, I understand that discussing one’s business can be very emotionally charged. They might even comment that we are not in a position to advise them since they have been running the business for the last 30 years. However, we can offer a different lens based on our deep understanding of their industry and our research on risk and returns. 

Especially in difficult times, trust is essential. I’ve always told clients, “If you have difficulties, don’t hide it! Let us know early on so that we can pre-empt the problem and structure better solutions.” In the last few years, there have been many cases where we were able to help customers tide through challenges – whether it was lockdowns, geopolitical challenges, or cash flow issues.

In the year ahead, businesses will face more economic challenges with rising inflation and a potential recession. How does DBS plan to support SMEs?

With rising inflation, SMEs are facing high interest rates that will add to their operating expenses. We can step in as advisors to look at their debt obligation across their entire business and strategise their next moves. For instance, should SMEs rethink their investments in areas with very low returns – or even put heavy investments on hold in the short-term?

To help SMEs transform their business models, we’ll also be focusing on sourcing for relevant support grants and subsidies from various government agencies. This can range from digitalisation support to boost their productivity, to services they can leverage on.

Besides interest rates, SMEs which are looking to enter new markets can count on our support in forging useful partnerships. SMEs in the food services sector, for instance, can tap on our network to source for necessary partners such as logistics and storage providers. For SMEs looking to expand, we can provide business insurance for protection and link them up with partners with the right capital. Together, they’ll be able to achieve their aspirations amidst the current economic headwinds.

Can you share one memorable case of a client who went through difficult times and has now emerged stronger?

We had one Singaporean client in the manufacturing and assembly sector, specialising in buses and trucks. Their assembly plants were based in Myanmar, and they sold to countries like Hong Kong.

He relied on operations outside Singapore to build his business – a smart strategy indeed, because such operations would have been comparatively costly in Singapore. Unfortunately, Hong Kong was rocked by protests at that time and Myanmar was reeling from a coup. While he was incredibly passionate about his business and had a great team, the geopolitical situation just wasn’t in his favour.

That’s where we stepped in by helping him to restructure his business and make it easier to ride things out. We provided advice about the sector and investment returns, and extended some financing facilities for him to achieve a pivot. As a result, he is no longer dependent on these two markets and has reached a more sustainable position to do well in future.

Sustainability is another rising concern for businesses. How can DBS help SMEs transition from brown to green?

SMEs are certainly facing pressure to embark on their ESG journey, both from consumers and larger corporates who buy their products and services. The big question for them is: are they on the right path to sustainability, and how can they accelerate their journey?

Different companies will be at different stages of the journey, and each will require tailored support from us. In fact, we’ve recently completed a survey on SMEs’ sustainability concerns and support needs, in partnership with Bloomberg. The survey can help SMEs identify which stage they are in and how they can progress.

For instance, they might have started trying to reduce their emissions but have hit a roadblock due to cost issues. Green and sustainable trade financing can be an option to explore. If they’re already in an advanced stage, they can consider monetising their data collection. DBS has built partnerships with solution providers from smart carbon measurement to traceability to enable SMEs to benefit from our ecosystem support.

In closing, do you have any words of encouragement for SMEs as we head into a challenging year?

Running a business can be a very lonely journey, especially in times of trouble. To all SME owners, I’d like to encourage them by saying that they do not need to be on this journey alone.

A client once told me that each day, when he got home after a stressful day of work, he looked into the mirror and saw only himself. There was no one else around him – it was an incredibly lonely feeling. His whole family was depending on him to make the right business decisions, and he felt alone in shouldering a huge burden.

But he came to us and shared his struggles, and we were able to create solutions with him. Today, he’s in a comfortable position as his business is thriving and he continues to share his experience by educating his kids to reach out to all stakeholders – the bank included – to ensure that they will not be in the same position of having no one to lean on when they eventually take over the business.

I’d like to end off with the encouragement to SMEs that DBS will be your trusted partner, beyond your banking needs, to guide you through this ever-changing landscape of opportunities and challenges.